Dealership Employment and Payroll Rose in 2018, According to NADA

While much of the news regarding car sales has been negative or neutral in recent months, there is one bright spot: employment. According to a report released last week by the National Automobile Dealers Association (NADA), employment and payroll are on the rise at American franchised dealerships. NADA Data 2018 found that the U.S.’s 16,753 franchised dealerships employed 1,136,600 workers last year. This figure is up 0.5 percent from the previous year. Dealers paid more than $66 billion in wages to dealership employees in 2018, which is an increase of 1.9 percent from 2017. On average, dealership employees earned $1,134 per week, up 1.8 percent from 2017.

“Direct employment at new-car dealerships once again topped 1.1 million employees at the end of 2018,” said NADA senior economist Patrick Manzi in a news release. “In addition to direct employment provided by new-car dealerships, hundreds of thousands of other jobs in local communities are dependent on dealerships.”

This growth is vital to communities across the U.S. because dealerships tend to offer compensation that is significantly higher than other retail sector businesses. Dealerships offer some of the highest average salaries of all industries.

The NADA Data 2018 report also revealed that the nation’s franchised dealers sold 17.22 million light-duty vehicles last year, with total new vehicle sales topping $1 trillion. On the service side of the business, dealerships wrote more than 310 million repair orders, with service and parts sales totaling more than $116 billion. While sales have been on the decline, dealers are making up for it with service and parts. Since 2009, service and parts sales on average per dealership increased by 5.5 percent per year on an annualized basis. During the same period, net pre-tax profit per dealership as a percentage of total sales (new and used vehicle sales, service, parts, F&I and body shop) have declined by 2.5 percent in 2016, by 2.3 percent in 2017 and by 2.2 percent in 2018.